Good Samaritan Hospital settles claims it defrauded health programs

Meredith Cohn, The Baltimore Sun

Good Samaritan Hospital agreed to pay $793,548 to settle allegations that it submitted false claims to federal health benefit programs for four years ending in December 2008, federal Department of Justice officials reported Wednesday.

The hospital denied any wrongdoing, but federal officials say the MedStar Health System hospital listed some patients admitted to the hospital as suffering from malnutrition when they were not diagnosed or treated for that condition. It was marked as a secondary condition in each case.

The federal officials said the hospital used leading questions so doctors would report in the record that the patients were malnourished, according to U.S. AttorneyRod J. Rosensteinand Nicholas DiGiulio, special agent in charge from the Department of Health and Human Services' Office of Inspector General, who announced the settlement.

This caused the patients to appear worse off than they were to the state agency that regulates hospital prices, which created a higher reimbursement rate. The Maryland Health Services Cost Review Commission sets all hospital rates in the state that must be paid by insurers, including Medicaid and Medicare and all federal health benefit programs.

In 2005, the agency changed its rules to allow for higher reimbursement for more severe secondary diseases.

MedStar Good Samaritan released a statement Wednesday saying the hospital "is committed to the highest quality of patient care. While we have always maintained that we have provided the highest level of quality care to our patients in accordance with all laws and regulations, we have chosen to resolve this matter with the government in order to focus on providing safe, effective, quality patient care and treatment."

The money was recovered under the federal False Claims Act, which is the government's key tool to tackle fraud in federal programs. The Justice Department recovered $5.6 billion in fraudulent payouts last year, more than $2.9 billion health care-related.

Maryland passed its own version of the law last year to better enable local officials to collect overpayments and fines.

The state and federal governments have been focused on "upcoding" to root out billions in health care fraud, using advanced technology to find suspicious billing patterns.

The Justice Department recently accused a rehabilitation hospital owned by the University of Maryland Medical System of purposely misdiagnosing patients with severe malnutrition. It's suing for $8.1 million, though the medical system is fighting the allegations.

Officials say the code is shared with another diagnosis, making it appear as though it had labeled many more patients with malnutrition than it had. The case will be decided in U.S. District Court, and it has hospital groups on the defensive about a coding process that is both complicated and subject to human error.

In the Good Samaritan case, federal officials say the hospital settled rather than submit to a long and costly legal battle.